Gen-i to cut two-thirds of Aussie staff

Up to two thirds of Australian staff at Telecom NZ’s technology services subsidiary Gen-i will be let go under a reorganisation of the business that could see major contracts abandoned or shifted.

The New Zealand telecommunications company said up to 120 employees of Gen-i Australia would be made redundant as part of a strategic review into the unit, as it shifted focus to large corporate customers with “specific trans-Tasman ICT service requirements".

The reorganisation comes only months after the subsidiary signed a five-year contact centre deal with Commonwealth Bank, an announcement trumpeted at the time after it lost out on another, billion-dollar deal with the bank to Telstra several years before.

The company would move some existing customers to AAPT, another Telecom NZ subsidiary.

A Telecom NZ spokesman said affected customers were being notified but would not clarify whether Commonwealth Bank’s five-year contract would be kept under Gen-i Australia.

Gen-i employs 2500 staff across Australia and New Zealand.

“We believe the time is right to return to Gen-i Australia’s core purpose and renew our focus on trans-Tasman ICT services," Gen-I chief executive Tim Miles said in a statement.

“Over the year, [Gen-i Australia] has broadened its activities within the Australian ICT services market - but we have never had the scale to compete effectively these other market segments."

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Mr Miles was appointed chief executive of the services division in December, after stints at Vodafone’s New Zealand and British divisions.

Telecom NZ reported a 4.9 per cent drop in interim revenues for the whole Gen-i division for the first half of the financial year last month, alongside a 1.6 per cent drop in earnings before interest and tax. However EBIT for the division’s IT services increased in the half by 21 per cent to $NZ23 million ($18.3 million).

The company attributed the declines to reduced revenues from voice and data services, particularly over copper networks.

Shares were down in the company 2.6 per cent on the Australian Securities Exchange at 1.30pm.